Looking up? That’s how Avison Young describes the commercial real estate market as it heads into 2025.
In its 2025 Outlook, Avison Young says that commercial real estate brokers, developers, owners and investors have reason to be optimistic as the new year arrives.
But don’t just take Avison Young’s word for it. The company surveyed U.S. market intelligence leaders across key CRE sectors. The big takeaway from these interviews? A total of 100% of the leaders that Avison Young interviewed said that they expect the commercial real estate market to improve in 2025.
These leaders told Avison Young that the long-term fundamentals of commercial real estate remain positive.
What does Avison Young see improving in 2025?
Leasing velocity: Occupiers are ready to embark on growth plans, according to Avison Young. To do this, they are leasing more commercial real estate space.
Investor interest: Avison Young’s experts say that they expect investors to return to commercial real estate in greater numbers in 2025, thanks to lower valuations and the potential to earn profits by making more affordable property improvements.
More construction in certain sectors: Avison Young predicts, too, that construction activity will rise in the industrial, data center and healthcare spaces, while remaining mostly the same in multifamily and office. The company only predicts a drop in construction in the retail and life sciences sectors.
This optimism doesn’t mean that the commercial real estate market won’t face challenges in 2025. Avison Young predicted that asking rents for commercial properties will remain flat in 2025 as will taking rents. The company also predicts that the level of concession packages offered by building owners will remain mostly flat in 2025 as will cap rates and investment pricing.
